Thursday, 1 August 2013

Consider the Walmart supplier sustainability approach

The Walmart Supplier Sustainability Index aims
to rank its suppliersbased on their sustainability performance and objectives. In 2009 the original list of about 15 questions was asked of its 60,000 suppliers. The basic survey covers a huge diversity of different products. It is interesting to consider a shift towards additional questions that focus on environmental attributes and performance by product category.

General questions to Walmart suppliers included information on emissions performance and environmental management practices in areas of energy and climate, waste management, water use, and resource purchasing. They surveyed both facility-level questions (“water use from facilities”) with product-oriented questions (e.g., life cycle product GHGs). And in between, there are questions that imply supplier or supply-chain performance (e.g., the production mix of electricity used). To be clearer, these levels might be better separated, or made more explicit, as ownership and responsibility vary between manufacturers and material producers versus product designers and engineers.In addition to the basic questions, Walmart seeks information relevant to about 200
product categories. At this more focused product level, I would refer to
existing peer-reviewed life cycle assessment (LCA) studies and published product
category rules. There is now a wealth of studies and analyses that has accumulated
in places like the International Journal of
Life Cycle Assessment, Journal of
Industrial Ecology, and www.environdec.com/.

In each product category it is first important to understand
the life-cycle and the environmental issues of relevance. Consider the profile of the subject product. The figure below illustrates
four product profiles types typical of manufactured systems as conceived in my PhD thesis [PDF]in 1996. In each plot, the x-axis shows simplified life-cycle
stages (of course this may change or may involve more stages) and the y-axis
represents one or more environmental impact categories (e.g., greenhouse gases,
water use, human toxicity). This helps frame what the “hot spots” are
and where in the life-cycle they occur. Then more assessment and direction for
improvement can take place with this focus in mind.

For example, consider
batteries. These are not really “end-products” in a classical sense, but like
many items, batteries fit into broader solutions systems. Batteries facilitate
the function of products that they power. Moreover, batteries are actually not
a single product category, and would logically be separated into single-use vs.
rechargeable, and into different formats (sizes and shapes) and different
chemistries. Alkaline single use batteries (AA, C-cell, etc.) in North America
no long contain mercury, and therefore are no longer of the “type D” product
profile presenting an end-of-life hazard. Their environmental profile is more reasonably
considered “type C”, and efforts to incite environmental performance
improvement need to consider length of life, including both shelf-life and
capacity during use. Nonetheless, as a material intensive and disposable
product (like packaging), single life batteries should also be designed for
end-of-life, in that collection and recycling systems are developing to avoid
disposal in landfills. Different profiles may be relevant for lithium-ion
batteries (which can contain more exotic resources and valuable metals like
cobalt and nickel), and mercury-containing button batteries like those still
used in hearing-aids

The whole Walmart supplier sustainability approach
is strongly life cycle based. However, referring to “life cycle analysis” is
not true to the precision of the ISO 14040
series of international standards on “Life Cycle Assessment” and may open
a level of vagueness on what respondents can interpret as a life cycle study. Full LCA includes multiple environmental categories – not just a focus on a
single aspect like GHGs. The emphasis on responsible sourcing (“do you know where your raw
materials come from”) and reference to “3rd
party certifications” of products sold into Walmart is part of a larger trend to sustainability standards and transparency on the provenance of our food, energy and materials worldwide.

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About Me

Steven B. Young is Associate Professor, School of Environment, Enterprise and Development (SEED), Faculty of Environment, University of Waterloo.
He researches sustainable materials management (SMM), life-cycle assessment (LCA) and enterprise carbon management. His interests relate to corporate social responsibility (CSR), standards and assurance, industrial supply-chains, and approaches to assess sustainability of products and material systems.